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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
from Spencer’s Benefits Reports: Employers’ medical benefits costs will rise an average of 7% in 2010, according to Towers Perrin’s annual Health Care Cost Survey. This latest increase, combined with the current economic climate, means record high costs and affordability challenges both for employers and employees, Towers Perrin said.
The average annual per-employee spending in 2010 will exceed $10,000, the study found, and even with employers’ typical 78% contribution, employees’ burden continues to rise for premiums and higher out-of-pocket costs. The survey includes data for approximately 300 of the nation’s largest employers covering 5.2 million employees and dependents, at an annual cost of $29.4 billion.
Employee premium contributions in 2010 will rise an average of 10%, or slightly more than $200, an increase from the 8% increase in 2009. Benefit design changes, including higher copayments, further add to employees’ cost burden. The average cost of coverage is $5,124 annually or $427 monthly for active employee-only coverage; $10,500 or $875 monthly for employee plus one dependent coverage; and $15,084 or $1,257 monthly for family coverage. Wages lag significantly behind health care cost increases, Towers Perrin noted.
“For employees, the affordability challenges associated with this year’s cost increases are even more acute than the general survey numbers suggest,” said Dave Guilmette, managing director of Towers Perrin’s health and welfare practice. “The cost-shifting actions employers are taking for 2010 are consistent with what’s been done in years past, which is surprising in an economy where bigger shifts might be expected. Nevertheless, employees are feeling the impact more keenly given that these actions come at a time when wages at some organizations are flat or declining.”
In addition, health care reform as currently proposed could potentially increase costs for employers; those cost increases would be passed on to employees, Towers Perrin suggested. As an example, Towers Perrin refers to the Senate Finance Committee’s proposal to tax plans with values exceeding a cap, but according to the survey, more than half of the companies responding will reach those caps within the next three years, before the cap would go into effect in 2013. Few companies, 11%, indicated a willingness to absorb those increased costs and instead would reduce benefits and increase costs for employees.
Another potential impact of health care reform would be to drive more employers and employees to adopt account-based high-deductible health plans (HDHPs) with health reimbursement arrangements or health savings accounts. “Because these plans have lower actuarial value than traditional health plans, they actually could help employers delay hitting excise tax cap limits by up to two years,” Towers Perrin explained. Employer adoption of HDHPs over the past five years has tripled from 20% of companies to 60%.
The Towers Perrin survey was conducted during August and September 2009. For further information, visit http://www.towersperrin.com.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
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